Refinancers flock to non-majors

AFG (ASX: AFG) today reported a jump in the number of Australian mortgage holders looking to leave the country’s major lenders.Following on from the previous quarter, consumers refinancing their home loans have again turned their backs on the major lenders in their search for savings, according to the latest AFG Competition Index.

AFG General Manager of Sales and Operations, Mark Hewitt explained the shift. “In terms of overall mortgage sales the majors and their subsidiaries slipped by 8.1% to close the quarter with 64.1% of the market. This is a post-GFC low.

The resurgence of the non-majors has largely been driven by those borrowers seeking to refinance. “The non-majors lifted their share of the refinancing market to 43.2% across the last quarter,” said Mr Hewitt.

“Suncorp with an increase of 3.3% and AMP with a lift of 2.1% led the way with refinancers, largely at the expense of the Westpac stable” he said.

Westpac and its other brands, Bank of Melbourne, Bank SA and St George dropped its share of total mortgages by a combined 8.4% for the quarter.

The majors have also pulled back from the investor market, with their share of that segment dropping by 7.0% for the quarter.

The Reserve Bank of Australia (RBA) decision to leave the official interest rate on hold at its December meeting has proved largely irrelevant to lender policies, with many lenders continuing the practice of lifting interest rates outside the RBA cycle.

“In the past week many lenders have been increasing fixed and variable interest rates. They have been targeting areas such as investment loans and this is often a trigger to encourage consumers to shop around,” said Mr Hewitt.

“In the current environment it is worth picking up the phone to your mortgage broker to help understand what is happening in the market and that your loan is still the most appropriate for your circumstances.”